Time Essay: What to Do About the Dollar

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DEVELOP AND CONSERVE ENERGY. Since the quintupling of oil prices by the OPEC cartel five years ago, the U.S. has spent $153.5 billion on oil imports, greatly swelling the world glut of dollars and reducing their value. Last week's Senate passage of the natural gas compromise was a small move in the right direction of reducing oil imports and increasing domestic energy production. Much more is needed. Congress is sure to kill Carter's proposal for a crude-oil equalization tax that would have raised U.S. oil prices to the world level and discouraged consumption. As a temporary substitute, the President should use his executive power to place an import tax or quota on oil imports. Beginning next May, the President will also have authority to deregulate oil prices. He should announce now that he will start moving then to increase prices; that will both slow imports and speed the search for more domestic oil and gas.

EXPAND EXPORTS. The U.S. must again become a nation of traders in order to close the trade deficit that this year will approach $33 billion. The President's new export policy does not adequately cope with the myriad Government barriers that block sales abroad. Some $10 billion in exports is being lost annually because of a variety of Government measures, including blocking exports to some countries in order to further human rights policy. American businessmen, most of whom have treated exports as a minor sidelight, must also become more aware of new sales opportunities after the sharp decline in the dollar. Exports amount to a rather meager 6.4% of the gross national product; Federal Reserve Chairman Miller urges a drive to raise

SHOW ECONOMIC LEADERSHIP. By dumping dollars, foreigners have been voting no confidence in America's economic leadership. The long congressional battle over energy, after which Carter won only part of his program, and the conflicting policy signals on the dollar and inflation have moved many foreigners to conclude that U.S. economic policy is out of control.

There have been serious conflicts and infighting among the President's economic advisers. Instead of one clear voice speaking with authority, the Administration has sounded like a Greek chorus. Treasury Secretary Blumenthal, Anti-Inflation Coordinator Robert Strauss, Domestic Adviser Stuart Eizenstat and a host of other instant experts freely toss out ideas, and the conclusion is confusion. Nobody knows who speaks for the President. The Treasury Secretary, who is traditionally the chief economic spokesman, has been contradicted and undercut repeatedly by the White House, and his effectiveness has been seriously impaired. Said one European minister at the IMF meeting: "This Administration should either express confidence in this Secretary of the Treasury or get a new one." The credibility of the Carter Administration to world moneymen will remain in doubt until there is one coherent authoritative voice on economic matters.